Stockholders concerned about BWIA=92s performance By CURTIS RAMPERSAD Express FIRST came the 2001 terrorist attacks in the United States. Then weak=20 travel demand. Then finally last week, massive retrenchment. If times=20 weren't tough enough for BWIA and its workers, now the cash-strapped=20 national carrier has to grapple with a group net loss of $182.1 million for= =20 fiscal 2002 and what its chief executive Conrad Aleong calls the =93very= real=20 danger of insolvency facing the airline=94. In a letter on January 28,= Aleong=20 told shareholders the airline industry was in serious trouble with=20 international carriers losing US$31 billion last year. Noting their=20 =93serious=94 concerns about BWIA's share performance, he told stockholders= =20 they were in a position to appreciate the =93need for drastic remedies=94 at= =20 the troubled carrier. The separation of 617 staff members last week, while= =20 unfortunate and regrettable, was part of an overall plan to turn around the= =20 airline, achieve profitability and improve shareholder value, Aleong said.= =20 Other measures included outsourcing ramp operations and closing down its=20 Duty Free shop and re-opening with a lower cost franchise operation. The=20 plan addresses the key areas necessary to restructure the airline to meet=20 the new challenges facing the industry, the CEO says. It encompasses seven= =20 new strategies which by 2004, should place BWIA in a position to restart=20 its growth plans. These include a four times weekly service between=20 Caribbean points and Florida and a BW428/429 service from Antigua to New=20 York three times weekly. Two additional weekly services will be operated to Toronto bringing the=20 total to 11 flights a week between the Caribbean and Toronto. The=20 Washington destination should see the achievement of daily services=20 increasing from the four weekly flights in 2003, BWIA projects. Atlanta or= =20 Boston flights are also planned with the return of Category 1 status which= =20 BWIA hopes Trinidad and Tobago will achieve by mid-2003. The increased=20 services will require the narrow body fleet to be increased. =93In 2004, we= =20 should be in the position to start rewarding our employees once again and=20 to recommence providing them better tools to do the job,=94 the airline says= =20 in an outline of the new business model. One of the most critical=20 strategies=97the establishment of a Technical Centre and contracting BWIA's= =20 heavy aircraft maintenance checks. For the next few years, according to=20 airline management, BWIA will have only Boeing 737 aircraft on which to=20 perform annual heavy checks. BWIA says forming a technical centre (with the= =20 Government and another private partner) to perform such overhaul and repair= =20 services for itself, Air Jamaica, Liat, Caribbean Star and other carriers=20 =93is the best solution for the medium to long term=94. With a maintenance human resource cost of US$6.5 million, BWIA said its=20 workforce of 342 people could not be maintained. It was reduced to 129=20 last week and will help the airline save US$2.4 million a year. Another=20 strategy entails entering new markets of Cuba, the Dominican Republic and=20 Costa Rica with the assistance of the Government. The airline has submitted= =20 proposals and says the Government has indicated it will help finance for=20 the first year. BWIA is also looking at lower aircraft monthly lease rates= =20 and reduced borrowing costs. Its plans explains that debt acquired in 2001= =20 averaged nine per cent which reflected market conditions at the time. Given= =20 improved cost of borrowings now, it is management's objective to=20 renegotiate existing debt at a lower average rate. This could produce estimated annual savings of US$400,000. As the=20 outstanding debts with creditors are settled, BWIA will attempt to secure=20 lower monthly lease rates for the next couple of years where the survival=20 challenges are greatest. BWIA's Lawrence Duprey-led Board maintains that=20 while the airline has valuable strengths, the global recession, the 2001=20 attacks and a a lagging tourism market have all hurt the airline and the=20 industry. Additionally Americans are still cautious about flying,=20 especially with the continuing terrorism threat and possible US invasion of= =20 Iraq, BWIA says. Now with competition more intense than ever before, BWIA=20 says its new business model is the only way to keep the airline in business= =20 and make money inflow higher than outflow. While the trade unions=20 representing BWIA workers continue to disagree with several aspects of the= =20 plan, BWIA says that: =93Unless this business model is implemented now, and= =20 fully, BWIA will not continue as a viable airline.=94 *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@escape.ca Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Site of the Week: http://www.caribscape.com/tamnakthai/ TnT Webdirectory: http://search.co.tt *********************************************************